Types of Life Insurance

There are different types of life insurance policies available. Shop around and compare policies to ensure that you receive the best deal possible. This sounds obvious, however, there are dozens of different types of life cover plans available and it is important that you select the right one for your circumstances.

Life Insurance is insurance that provides protection against the economic loss caused by the death of the person insured. There are several types of Life Insurance, each having different characteristics. Some of the key types of Life Insurance are: Term Life, Whole Life, Burial Insurance, Survivorship Life, Universal Life, and Variable Life Insurance. Outlined below is a useful description of each type:

Term Life Insurance

Term Life Insurance is the lowest cost and simplest product available. Term insurance is a life insurance contract that provides protection for a limited number of years. The death benefit is only payable if death occurs during the agreed-upon term. There are various types of Term Insurance Life Policies:

Level Term Life Insurance

Means that your premiums are set at a level at the beginning of the contract and do not move up or down. The sum assured will remain the same throughout the term.

Increasing term insurance

This is a fixed term policy where the sum assured will increase, either by a set percentage or by the Retail price index (RPI) throughout the policy term. Your premiums remain level throughout the term if the sum assured rises by a set percentage, or will rise according to the RPI if the sum assured does the same.

Renewable term insurance

This is policy lasting for a smaller period, usually five years, which can be renewed, although the sum assured cannot be increased, whilst the premiums will increase with age. Renewable increasable term insurance is the same as above but provides for an increasing sum assured.

Convertible term insurance

Provides the option to convert parts of the sum assured to whole of life, endowment or further term assurance without further medical evidence.

Decreasing term insurance

Is where the sum assured decreases over time; hence, the premiums are set lower. This is commonly used to cover a mortgage.

Whole Life Insurance

Life insurance that remains in force during the insured's entire lifetime, provided premiums are paid as specified in the policy. Whole life insurance also builds a savings element (called the cash value) as a result of the level premium approach to funding the death benefit.

Burial Insurance

Burial Insurance, or Final Expense Life Insurance, is essentially a whole life product with small face values. The application process is simple and does not have the associated medical requirements of other policy types. This type of life insurance is also referred to as a simplified issue or guaranteed issue policy.

Survivorship Life Insurance

A type of whole life insurance which insures two people and pays benefits only after the second person dies. It is generally designed to provide funds to pay estate taxes.

Universal Life Insurance

An unbundled whole life insurance product in which the mortality, investment, and expense factors used to calculate premium rates and cash values are expressed separately in the policy. In a universal life insurance policy, any applicable expense charges are deducted from the premium and the remainder of the premium is then credited to the policy's cash value. Each month the insurer deducts the mortality costs from the cash value and credits the remainder of the cash value with interest.

Variable Life Insurance

A form of whole life insurance under which the death benefit and the cash value of the policy fluctuate according to the investment performance of a separate account fund. Most variable life insurance policies guarantee that the death benefit will not fall below a specified minimum. A minimum cash value is seldom guaranteed.

You may freely reprint this article provided the author's biography remains intact:

About The Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

---

Better Links Directory

Disability Insurance For The Long Term

Disability insurance covers you for an extended period of time.... Read More

New Concepts in Car Insurance - Pay as You Drive

You can pay as you talk with a cell phone... Read More

Can I Really Get Life Insurance, No Exam Required?

Changing the way that life insurance is bought and sold... Read More

Do I Need Travel Insurance?

In the United States health insurance, unlike many other countries,... Read More

Guide to Home Insurance

Here is a useful guide to Home Insurance. Home insurance... Read More

Independent Insurance Agents Unite! Insurance and Financial Discussion Forums are all the Rage

The online discussion forum has emerged as the medium of... Read More

Health Savings Account (HSA): Useful for Women in Childbearing Years?

The Health Savings Account (HSA) is an amazing tool that... Read More

Why Boat Insurance Doesnt Help A Lousy Sailor

For thousands of years men have sailed the seas. From... Read More

The Great Value Of Accident Photographs

You were humming along on a bright and sunny day... Read More

Student Health Insurance - Is It Necessary?

As a young, healthy college student, it might be tempting... Read More

How to Shop for Individual Health Insurance

If you find yourself in the position of shopping for... Read More

Your Personal Injury Insurance Claim: Several Crucial Insights Into Medical Reimbursements

The best judge of Total Disability and/or Partial Disability is... Read More

Life Insurance Basics

One of the most important things you can do as... Read More

A Life Insurance Quote Became Reality

Life insurance quoteThank goodness John took his life insurance quote... Read More

Auto Insurance Rates

Auto insurance rates will vary depending on the insurance agency,... Read More

Protecting Your Expatriate Family

If you and your family relocate overseas, one of your... Read More

Finding Fast Life Insurance

Since the widespread growth of internet usage and database building... Read More

How To Best Handle Health Insurance Plan Changes

Many economists have suggested and recent economic data indicates that... Read More

About Accidental Death Dismemberment Insurance Quote

We don't hear much about getting an accidental death dismemberment... Read More

Cheap Health Insurance - Health Insurance for The Self Employed

If you're self employed, you may think of health insurance... Read More

Need A Car Insurance Comparison? Dont Have Time?

If you decide not to do a car insurance comparison... Read More

The Need For Life Insurance

A person needs to reexamine their life insurance needs every... Read More

Do An Auto Insurance Comparison And Benefit From The Savings

It is very important to do an auto insurance comparison... Read More

Why Should You Shop Around for Auto Insurance?

How do you know if what you are paying for... Read More

Cheap Auto Insurance Quotes ? Tips For Getting The Lowest Rate

Finding auto insurance quotes online is easy, but finding the... Read More